But how can this be?

[bawanajim]

Just when things were going so well,jobs who needs jobs if the Chinese will work for rice we should too.

WASHINGTON — Americans' household income last year took the sharpest drop since the government began keeping records in 1947, the Census Bureau reported Thursday.
Median household income sank 3.6% to $50,303, after adjusting for inflation, during the first full year of the recession.

INTERACTIVE MAP: Changes in household income
UNINSURED: Gov't programs helped keep tally down

Income tumbled to its lowest dollar level since 1997 — a decade's worth of gains wiped out in one year — and things will get worse before they get better, says Sheldon Danziger of the Population Studies Center at the University of Michigan.
"2009 is going to be dreadful," he says. He predicts income will drop at least 5% this year because of rising unemployment in the recession's second year.

[kevin1]

I wish I was making $50K...

[burniegoeasily]

Just wait. More inflation is a coming. It is a given with the amount of money our government is spending.

[wihunter32]

Originally Posted by burniegoeasily

Just wait. More inflation is a coming. It is a given with the amount of money our government is spending.

not if people keep losing jobs

[DougMD]

Not true. If it were, there would be no such thing as "stagflation," but we know from the Carter years that we can have double digit inflation at the same time unemployment is high.

[bawanajim]

For the first 11 months of the budget year, spending totals $3.26 trillion, up 18.7% from a year ago, while tax receipts fell 16.1% to $1.89 trillion.

[Fieldmouse]

Bawa, that doesn't matter. Obama found the keys to the print shop.

[falcon]

Obama found the keys to the print shop.

Obama did not need to find the keys to the print shop, they came with the job. Obama is simply running the presses faster than Bush did.

[wihunter32]

Originally Posted by DougMD

Not true. If it were, there would be no such thing as "stagflation," but we know from the Carter years that we can have double digit inflation at the same time unemployment is high.

stagflation is caused by shocks to aggregate supply such as an oil embargo or other event. a loose monetary policy and stimulative fiscal policy will only affect the demand side. if inflation is caused by the demand side, there will be no economic stagnation and thus no stagflation.

from the BLS:

From July 2008 to July 2009, prices for finished goods fell 6.8 percent, the index for intermediate goods decreased 15.1 percent, and crude goods prices dropped 44.8 percent, all of which are record 12 month declines.

More Evidence of Deflation